On March 26, 2019, the New Jersey Supreme Court ruled motor vehicle accident personal injury claimants who play the Name Your Own Price insurance option get what they pay for—no ability to sue the Tortfeasor for medical expenses amounting to less than $250,000.

The State of New Jersey ranks near the top of the United States in terms of personal injury protection (“PIP”) benefits, setting a default amount of $250,000.   The expenses that are medically necessary and causally related to a motor vehicle are to be paid regardless of fault.  In return, the medical expenses paid or collectible by PIP are not admissible at the time of a personal injury trial.   N.J.S.A. 39:6a-12.

However, the laws were amended to allow New Jersey residents to choose a lower amount of PIP coverage in order to lower their premium.   A common refrain in the world of automobile personal injury cases is the plaintiff opts for PIP coverage for the state minimum of $15,000, which even under reimbursement rates set by PIP fee schedule, is exhausted by the time the plaintiff leaves an emergency room.     The plaintiff then racks up additional uncompensated medical expenses and then seeks to recover them against the other at-fault driver(s). 

In the unpublished decision, Judge Toskos, sitting in the Law Division in Bergen County, issued a written opinion in Kim v. Kim, 2010 N.J. Super. Unpub. LEXIS 2302 (Law Div., Bergen Co.)(May 24, 2010), which held that boarding of medical expenses starts at $250,001 and any expenses less than $250,000 in PIP coverage was inadmissible at the time of trial.   Judge Toskos’ rationale was the legislature provided up to $250,000 PIP coverage and the purpose was to keep suits for medical expenses from clogging up the Courts.  Essentially if the plaintiff decided to procure a lower PIP limit in order to save on their premium, that plaintiff would not enjoy a windfall by being able to sue for the medical expenses between the PIP limit and the statutory default amount of $250,000. 

In a published decision, Judge Grispin, sitting in the Law Division in Union County, issued a written decision in Wise v. Marienski, 425 N.J. Super. 110 (Law. Div. 2011), which reached the polar opposite decision of Kim, supra.    The Wise court held that victims of automobile accidents can recover medical expenses from the tortfeasor beyond their PIP limit, even if less than $250,000. 

This of course led to individual judges and some counties following the Kim and Wise decisions, leading to disparate results. 

Fast-forward, the Appellate Division was confronted with the differing conclusions the Kim and Wise decisions in two consolidated matters of Haines v. Taft and Little v. Nishimura,  450 N.J. Super. 295 (App. Div. 2017).   For the time being, the Appellate Division ended the case law dispute, following Wise and allowing plaintiffs to bard medical expenses exceeding their particular PIP limit.   The defendant drivers sought certification from the New Jersey Supreme Court.

On March 26, 2019, the New Jersey Supreme Court issued its written decision in the consolidated matters of Haines and Little and reversed the Appellate Division.  The Court affirmatively held that drivers cannot seek to recover expenses between their PIP limit (i.e., a $15,000 policy limit) and the statutory default PIP limit of $250,000.     The majority traced the history of automobile insurance legislation in New Jersey, finding that with legislative intent was “one of cost containment,” including “strong evidence of legislative effort to avoid fault-based suits” for medical expenses.    The majority found that efforts to control costs would be undercut by the ability of a third party to sue for medical expenses above their PIP policy coverage limit but below the presumptive amount of $250,000.   The Court also noted that one who chose a lower PIP coverage option could end up receiving a higher overall reimbursement. 

The Supreme Court invited the Legislature to correct its interpretation of the law by more clearly indicating its intention to allow such claims for medical expenses to proceed.

Justice Barry Albin dissented; he argued that the majority’s ruling will disproportionately impact poor litigants that cannot afford platinum level coverage policies.

What the Court did not touch upon are situations in which a healthcare plan has been designated primary for PIP or when an ERISA plan or Medicaid or Medicare picked up the tab for the medical expenses exceeding the PIP limit.  Therefore, this battle is far from over and issues remain undecided. 

In addition, N.J. State Senator Nicholas Scutari had previously sponsored legislation in 2018 to make the Appellate Division’s ruling in Haines and Little statutory law.    https://www.njleg.state.nj.us/2018/Bills/S2500/2432_I1.HTM  The bill narrowly passed a committee vote of 3-2 in June 2018.    With this ruling, we may see further action on this bill in the legislature.  

Frank Caruso is a partner with the firm in its General Liability department.  Please feel free to contact him at (732) 545-4717 or fcaruso@hoaglandlongo.com with any questions or issues.